house51 - Everything is not awesome! #DS2015
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Can behavioural economics save us from 'yes person' consulting?
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house51 - Everything is not awesome! #DS2015
- 1. Everything is NOT Awesome! @mishmashhouse51 powered by
- 2. We are interested in people, not consumers
- 5. Fairness
- 15. Connect?
- 18. Bounded Ethics
- 19. System 2 System 1 Unconscious Conscious
- 20. System 2 ‘Most managers think of themselves as ethical people. And they do not intentionally engage in unethical behaviour’ (Bazerman & Moore , 2013) System 1
- 21. confirmation bias anchoring endowment effect loss aversion Confirmation bias availability heuristic hyperbolic discounting framing over precision choice overload status quo bias illusion of control herding Confirmation bias attribution bias bounded ethicality recognition bias
- 22. confirmation bias anchoring endowment effect loss aversion Confirmation bias availability heuristic hyperbolic discounting framing over precision choice overload status quo bias illusion of control herding Confirmation bias attribution bias bounded ethicality recognition bias In Group/ Out Group Illusion of Control Confirmation Bias
- 23. In group - out group
- 24. In group - out group
- 29. Connect?
- 30. Self Regulation
- 31. Manage Bias
- 32. ‘Liars in the service of truth’ Drummond (2012) DATA TECH
- 34. Messenger Incentives Norms Defaults Salience Priming Affect Commitments Ego We are heavily influenced by who communicates information Our responses to incentives are shaped by mental shortcuts We are strongly influenced by what others do We go with the flow of pre-set options Our attention is drawn to what is novel and seems relevant to us Our acts are often influenced by unconscious cues Our emotional associations can powerfully shape our actions We seek to be consistent with our public promises We act in ways that make us feel better about ourselves Dolan, Hallsworth, Halpern, King, & Vlaev, (2010).
- 37. Our desire to confirm our initial ideas is so strong that we will pay people to back us up!(Bazerman & Moore)
Editor's Notes
- Hello House51 is a collective of senior consultants who specialise in market research and behavioural insights
- One thing you should know about us is that we have a problem with the word consumer We think you should too! We will tell you why later in the presentation
- Lets start with an amusing little film that shows how monkeys react when they think they are no getting fair pay For a monkey that means getting paid in grapes Not cucumber!
- Video - showcases a ‘Fairness Study’ that shows how Capuchin monkeys reject unequal pay. In the study, two monkeys are asked to do a job - handing a lab worker a small rock - for which one was given a piece of cucumber and the other was given a grape. The first time a monkey completes the required task he is recompensed with a small chunk of cucumber and eats it without a kerfuffle. But when he notices his pal getting a grape - obviously valuable currency among primates - for doing exactly the same task he goes mad. He ditches his second chunk of cucumber at the scientist then pounds the table and rattles the walls of his cage in protest of the pay disparity. De Waal said if both monkeys get cucumber as a reward they are happy to repeat the task up to 25 times. 'But if you give one grapes, which is a far better food, then you create inequity between them,‘ De Waal said. Mr de Waal and his colleague, Sarah Brosnan, published their findings in the journal Nature in 2003. He said the study has now been repeated with dogs, birds and chimpanzees.
- The main point of the experiment is that monkeys have an innate sense of fairness Evolution has hard wired fairness into a wide range of animals - including humans But of course, in the real world, the route to fairness is far more complicated and oblique
- For every positive story like the rise of the ethical consumer …
- … there are dystopian nightmares like Black Friday. Where for one special day a year it has become acceptable for people to try to kill each other over a flat screen TV. And for it to be filmed and broadcast for our entertainment as news!
- For every global brand like Unilever that is finally getting serious about ethics, sustainability and social leadership …
- … there are strong feelings about those that fall far short of peoples expectations
- Our new research study There’s Much to Do provides a detailed exploration of these contradictions It takes a closer look at ethics and trust in business in the UK
- We surveyed attitudes to almost 60 of the biggest UK brands The topline confirms the profound disconnect between businesses and the people they aim to serve and represent
- Less than 20% of people trust business leaders or the corporations that they lead
- And there is widespread scepticism about the motives of business Suggesting a real challenge to brands credibility as social leaders
- Three quarters of people don’t believe that business cares or is listening So clearly Everything is Not Awesome And There’s definitely Much to Do
- Of course none of this is really new news There is a wealth of other research that corroborates the data we have just shown At house51 we principally use this stuff to provide context for other research But if there is so much data that shows the lack of trust etc. Why aren’t businesses doing more about it? Why aren’t they doing a better job of connecting?
- The popular explanation tells us that business really is evil Lead by control freaks rise to the top and single mindedly pursue their own agenda And try to bend everyone else to their will.
- And dominated by an overly rational model of economics which is simply incompatible with the fairness demonstrated by those monkeys
- There may be some truth is both of these explanations. But there just aren’t enough bad people to explain all the bad stuff that happens Good and fair people must be making a lot of mistakes too Bounded ethics explains why this happens
- Behavioural science tells us that the scope of unconscious, automatic decision making has been greatly underestimated by standard models of economics and decision making Many of you will be broadly familiar with dual process theories of the mind- System 1 and System 2 Probably in a consumer context But System 1 plays a big role in business ethics
- Google the Big List of Behavioural Biases This is a selection of over 130 separate biases (and counting ) that have been shown to impact financial decision making
- We will focus on 3 to illustrate the power of System 1 thinking in business decision making
- We all recognise this trend We tend to associate positive characteristics and favour groups we belong to We are more likely to feel negatively towards groups we don’t belong to At it’s extreme it leads to stereotyping, discrimination and racism
- But think about the language we routinely use in business There’s a growing body of work about the consequences of the language we use Defining people (by the way that’s you and me) by the narrow goals of business- i.e. to consume But also creates an in group (them and us culture) It becomes easy to focus on the goals of the in group It’s easy to loose sight of the ethical implication of our narrow focus and favouritism
- Our day to day lives are full of placebo buttons. Buttons which provide no real control over a system, but which to the user at least is psychologically fulfilling to push. The world is a scary/messy place Feeling you have control over the world is a desirable state (Langer) When we have a lot of control - we tend to underestimate our control - i.e. fatalistic attitudes towards health When we have little control we tend to overestimate our control - superficial signs of control like picking our won lottery tickets
- How much control do we really have over peoples economic behaviour? Do our models, data and technology really enhance our control - or our illusion of control? Our innate tendency to overestimate our abilities means we often see ourselves as superior to other people We overestimate our own contributions and underestimate those of others Overconfidence breeds complacency Should we be more modest about our abilities, do we need to show more humility?
- We seek out information that confirms our values and beliefs Very low motivation to scrutinise it or criticise We ask ‘May I believe it’ Gilovich (1991)
- If the fact don’t fit our models we ask a different question ‘Must I believe it?’ Confirmation bias is intensified under aversive conditions- stress, pressure tiredness i.e. a typical business environment ...
- So, in terms of driving a better connection between business and people There’s two main points we’d like to emphasise Business is not evil - it’s you and me doing the best we can with our limited cognitive resources And because of this - more data and more technology wont be enough to achieve our goals
- If we don’t self regulate and manage bias The risk is that more data and more tech simply reinforces our existing mental models and biases We connect and achieve greater understanding not by acquiring more information, but by understanding the limits of our information.
- There are two straightforward ways we can do this: checklists, falsification
- Checklists can help you to use behavioural science to self regulate. In marketing and policy the emphasis has been on what we can do to change the behaviour of ‘other people We can turn the behavioural lens on ourselves and use the knowledge to make better decisions This is MINDSPACE - used by the Behavioural Insights team But there are many others
- Coming back to project sunlight – an example of a company trying to self-regulate by making a public commitment
- We need to go cold turkey on validation and our vanity metrics We need to set falsification as a default in our decision making
- Bazerman tells the story of who tell the story of how Richard Thaler (co- author of Nudge) came up with the idea of starting two new consulting firms: ‘One of them called ‘Yes Person’ would respond to all requests for advice by telling the client that all their ideas were great…. The other consulting firm called ‘Devil’s Advocate’ would disapprove of any plans currently being considered by the client’ (Bazerman & Moore, 2013, p. 49) Thaler was sure that there was much more need for ‘Devil’s Advocate Consulting’ than ‘Yes Person Consulting’. But he was equally convinced that neither start up would get off the ground. ‘Devil’s Advocate Consulting’ would struggle to find any clients and the market for ‘Yes Person Consulting’ was already far too crowded!
- Believe in the power of no!
- Thanks!